We're Adding to This Position as Shares Find Their Footing
Taking advantage of the oversold condition of this quality company.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
WM | Buy | 75 | $205.10 | 835 | 3.4% |
After you receive this alert, we will buy 75 shares of Waste Management WM at or near $205.10. Following the trade, the Portfolio will own 835 WM shares, roughly 3.4% of the Portfolio.
We are taking advantage of the 10% drop in Waste Management shares, which has landed them in oversold territory of late, making our move as the shares find their footing. We can trace this recent pressure on WM shares back to when we received November economic data that hinted a slower pace of rate cuts by the Fed in 2025. The reaction in WM shares stems from higher-than-previously-expected interest rates in 2025, which has dampened the expected upturn in construction activity next year, especially for the housing market.
While that will be a modest headwind for Waste’s non-residential construction business that will still benefit from infrastructure and data center construction, the sticky residential business will continue to benefit from greater use of automation and selective pricing, resulting in margin improvement. With the closure of its Stericycle acquisition, Waste will begin to integrate that business, one we see as a complimentary one to our position in Labcorp LH. That should start to pay dividends in the coming quarters as well.
Another factor in making our move now with WM shares, besides their current oversold nature, is it will increase the Portfolio’s dividend stream. Waste recently announced that its board approved a 10.0% increase in the planned quarterly dividend rate for 2025 to $0.825 per share from $0.75. This increase brings the annual dividend rate to $3.30 per share, up from $3.00, and marks the company's 22nd-consecutive year of dividend increases. This first increased dividend is expected to be paid in March 2025.
As we make this latest move for the portfolio, we will continue to keep close tabs on some of our larger position sizes as the Santa Claus rally period continues. The same goes for other positions currently in oversold territory, like the shares of Builders FirstSource BLDR and United Rentals URI.
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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long WM, LH, BLDR and URI.
